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CDAC Spotlight Back to the Future: Financial Capability in Social Work Practice

Social workers serve in communities from the Mississippi Delta and the Ozarks to Memphis, Little Rock, St. Louis and beyond. With their community partners, social workers help residents meet basic human needs and enhance well-being. Increasingly, this means developing strategies for assisting families who are struggling economically and are uncertain about what the future holds. Families seek guidance in making household financial decisions and information about how to obtain workable financial accounts. They look for ways to build financial security. Financial development with families is essential to addressing the physical and mental health, nutrition, housing, schooling and other challenges facing families today.

The importance of financial security is felt not only in families, but in neighborhoods, towns and cities across the region. In dollar terms, financial insecurity in households causes disruptions, such as unpaid taxes and bills, which are costly to businesses and public budgets. The largest losses, however, are to the families—and to society as a whole—when people are unable to reach their full potential. Financially unstable and insecure families cannot invest in themselves and their children. We all lose as a result.

Growing attention to financial development harkens back to social work’s past. One hundred years ago, in the profession’s earliest years, financial development was a central focus. Social workers helped families manage their finances, were instrumental in developing savings banks, and were key players in conducting research and developing social policies for the most vulnerable families during the age of industrialization.

For the past five years, researchers at the Center for Social Development at Washington University in St. Louis have been renewing this historical focus, including creation of a curriculum that prepares social workers for financial practice. The curriculum will be published this year as a textbook, Financial Capability and Asset Building in Vulnerable Households: Theory, Research, and Practice. The first part of the book sets the stage by introducing key concepts, historical antecedents and challenges faced by low-income and minority families in obtaining financial services and managing finances. The second part provides knowledge and tools for working with financially vulnerable families to manage income, create a household budget, pay taxes, build a credit record, handle expenses, catch up on bills, cope with problem debt and identity theft, manage housing costs, buy a home, pay for higher education, plan for retirement and more. The third part recommends a lifespan perspective of financial capability and offers practice principles and skills, such as financial counseling and coaching, community building, policy, and advocacy for financial capability and asset building (FCAB).

Among the earliest adopters of the FCAB curriculum were faculty from 19 historically black colleges and universities (HBCUs). They attended workshops in St. Louis to learn and share approaches to teaching social work students. Faculty reported in evaluations that the hands-on approach to teaching, case examples and readily available resources for the classroom and field were most useful.

Instructors reported that students initially wondered, “Why financial issues in social work?” Once underway, however, the instructors observed that students see the connection and are eager to learn more. As they point out, many students come from disadvantaged communities themselves and quickly see the relevance. One faculty member says she tells her students, “Look at your own community. You have streets. You have sidewalks. You need lights? What’s the big piece missing? It’s money!”

Meanwhile, other developments are bringing financial development into social work. The dividing line that once existed between social services and financial services has grown increasingly blurred, as social service agencies have increasingly integrated financial practice into their programs. Some are now assessing clients’ financial capability at intake, along with their more traditional assessments. Growing numbers of agencies now offer savings, homeownership and enterprise opportunities. Some financial institutions offer financial accounts and transactions on-site in social service agencies. Organizations such as Cities for Financial Empowerment, the Financial Clinic (and Change Machine) and LISC promote the integration of financial counseling and coaching in municipal and other human services.

The profession of social work has embraced the idea of financial development. In 2016, “Financial Capability and Asset Building for All” was declared a Grand Challenge for Social Work by the American Academy of Social Work & Social Welfare, an honorific society of distinguished scholars and practitioners dedicated to achieving excellence in the field. Members of the FCAB Grand Challenge initiative are creating research, policy and program proposals. These will be supported by a recently launched initiative and website by the Council on Social Work Education—“Clearinghouse for Economic Well-Being in Social Work Education.”

The development challenges of communities across the region cannot be solved by social workers alone, but these professionals play an important role in reaching the most vulnerable in society. Jane Addams, one of the profession’s founders—and the first woman to win the Nobel Peace Prize—said that social workers are “among the people.” For this reason, they are in a unique position to reach families directly and to inform policies and programs that build financial capability and assets in all American households.

CDAC Member Spotlight: Margaret S. Sherraden

Margaret S. Sherraden is founder’s professor at the school of social work, University of Missouri–St. Louis (UMSL), and research professor at Washington University in St. Louis. Sherraden taught for 25 years in the school of social work at UMSL, where she also chaired the master’s program in social work. Currently she is faculty director of the Financial Capability and Asset Building (FCAB) Initiative at the Center for Social Development at Washington University in St. Louis. Her scholarship and teaching focus on social policy, household and community development, and international volunteer service. Her five books include a forthcoming volume, Financial Capability and Asset Building in Vulnerable Households: Theory, Research, and Practice, to be published this year by Oxford University Press. She is a leader of the “Financial Capability and Asset Building for All” initiative, one of the 12 Grand Challenges in Social Work, and is a member of the Community Development Advisory Council (CDAC) for the Federal Reserve Bank of St. Louis.